A senior fellow economist of the Heritage Foundation center and former economic advisor of President Donald Trump, Stephen Moore, recently came out with a statement regarding the repercussions tax hikes could have on the economy. Moore believes if Republicans agree to raise tax rates, the economy could face a ‘catastrophic’ bear market. He especially stressed how increasing corporate or personal income taxes would serve as a blunder for the party.
Tax Cuts Were a Key Driver of Market Growth
“Republicans were put on this Earth to cut tax rates, not raise them,” said Moore in an interview with Fox News Digital. While advising Trump in his first term, Moore made the observation of the market boom following the tax cuts initiated in 2017 and argued for the benefits of reducing taxes. He stated the hype surrounding tax cuts must never be ignored and ought to serve as the guiding principle to avoid the panic that stock markets tend to create.
The Dangers of Panic Selling
The mistake that is the most catastrophic is when people negotiate their assets at a loss“. As he noted, “People get scared and sell their stocks at much lower prices,” Moore said. This comment shows worry over the fear-based choices and their impact on advanced investment plans and how that could further increase a destabilized market.
Short-Term Pain for Long-Term Gain
Moore encouraged long-term investors to hold on even if stock prices continued to decline for the foreseeable future. “In the event you are invested for the long haul, this is the moment you want to really buy because the market is going to revive and spring back to life,” he stated as he noted the market would recover in time, regardless of current conditions.
Tax Discussions Heat Up in Washington
“This is concerning with ongoing market volatility,” said Moore, who is in favor of the Trump tax plan, as President Trump and the Republican Party have been keen on extending tax cuts, estimated to expire in the coming year. He stressed the greater dangers of raising corporate tax or hiking the personal income bracket tax because that would hurt small business owners.
Optimism for Recovery Despite Tax Hikes
Moore continues to express hope that the matter can be resolved without any additional damage to the economy. During the first term of Trump, Moore pointed out how the administration’s pro-business policies seemed to have yielded a positive outcome for the economy. He pointed out that the approach Trump took was largely centered around cutting taxes and increasing the laissez-faire attitude towards the regulation of businesses. This resulted in the stock market and the economy reaching new heights.
Trump’s Policies Could Lead to Market Rebound
“Trump is probably the most pro-business and pro-America president we’ve had in modern times,” was Moore’s quote about Donald Trump, predicting a similar recovery could be observed in the coming months if the proper actions were taken. He did note, however, that the right fiscal measures have to be put in place; otherwise, wishing for a sudden economic recovery would be impossible despite the weak market conditions.
Tax Policy and Market Stability
Moore touched upon some of the other issues concerning public finances currently under discussion, especially related to the ending of tax cuts for certain sections of the population. Nearly all Americans will be impacted by higher taxes if these tax cuts are not extended in one way or the other. Some congressmen are considering increasing the taxes, but as Trump gained so many gains for the country during his presidency, I question that any move under such a scheme would gain anything.
The Crucial Role of Tax Cuts in Economic Growth
With the economy at a critical juncture, policymakers should consider tax cuts as an effective approach for increasing economic stability and market expansion, said Moore. In his view, absent these cuts, the economy is likely to enter a prolonged period of stagnation recession, which could be worsened if additional taxes are put in place.
The Relevance of Exercising Caution and Forward Planning for Market Stability
As noted in the preceding paragraph, tax policy and its implementation have direct repercussions on maintaining economic stability and sustaining growth in markets. He is emphatic that tax cuts are necessary and each dollar taken away from taxpayers economically translates to a bear market that is counterproductive for the small business owners.
Moore’s focus illustrates the significance of the long-term vision investment action plan and encourages decision-makers to resist panic-induced reactions during turbulent market circumstances. He continues to be puzzled by the fluctuations, yet still believes that if appropriate policies are implemented, the economy could be revived as was the case in the first term of Trump’s presidency. Those were the critical policies with balancing strategies surrounding fiscal actions in the markets.
